December 25, 2024

Amazon Web Services CEO Adam Selipsky speaks at the Bloomberg Technology Summit in San Francisco on June 22, 2023.

David Paul Morris | David Paul Morris Bloomberg | Getty Images

Amazon It said on Tuesday that its first-quarter cloud division revenue increased 17% year-on-year, a growth rate that exceeded Wall Street expectations.

Revenue from Amazon Web Services reached $25.04 billion, according to the company’s earnings statement. Analysts polled by StreetAccount had expected $24.49 billion. This growth was an improvement from the 13% AWS growth reported by Amazon in the fourth quarter.

While Amazon remains primarily an online retailer, the company has become a major entity in the information technology sector, providing computing resources, database software and network services to large corporations, startups and governments. AWS accounts for 17% of Amazon’s total revenue of $143,313 billion.

Since software profit margins are high, cloud computing is also a reliable source of profit for Amazon. AWS achieved operating income of $9.42 billion, accounting for approximately 62% of Amazon’s total revenue. Analysts polled by StreetAccount had expected AWS operating income of $7.52 billion. AWS operating margins expanded to 37.6%, the highest level since at least 2014.

last week, Google and Microsoft Both report accelerated growth in cloud computing.Industry researchers say Amazon still has a larger presence in the market than either segment and is growing faster than other areas of information technology, including equipment and data center systems. Gartner Corporation.

This quarter, Amazon explain It has completed a $4 billion investment in startup Anthropic, which relies on AWS chips to train artificial intelligence models. AWS CEO Adam Selipsky said Axios In an interview, Anthropic offers “the leading model currently on the market” in certain areas. Google, which invested in Anthropic early on, provides its own artificial intelligence model, as does OpenAI, which Microsoft supports.

“We’ve racked up billions of dollars in revenue run rate,” Amazon CEO Andy Jassy, ​​the former head of AWS, said of generative AI on a conference call with analysts. Analysis Experts believe that Microsoft’s annual cloud revenue is worth billions of dollars related to artificial intelligence.

Amazon further reduced its cloud optimization efforts this quarter after many organizations sought to make the most of their cloud spending, Brian Olsavsky, the company’s finance chief, said on the call.

watch: CFRA’s Zino said cloud vendors can monetize artificial intelligence faster than other companies when talking about Microsoft’s earnings

CFRA's Zino said cloud vendors can monetize artificial intelligence faster than other companies when talking about Microsoft's earnings

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